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US fund scandal hits savers

AN investment-fund scandal that has swept America is beginning to rattle fund managers in Britain.

Earlier this year, Eliot Spitzer, the New York attorney-general, claimed that the American mutual-fund industry was involved in dubious practices that cost savers more than $5 billion (£3 billion) a year.

The Financial Services Authority (FSA), the City watchdog, has recently started to question British investment firms. Shares in Amvescap, the Anglo-American fund manager, slipped 4% last week when it was reported that Spitzer was preparing charges against the group. We answer your questions on the scandal.

What is the scandal about?

The furore in America centres on late trading and market timing. Late trading is illegal, but figures from the Securities and Exchange Commission show that more than a quarter of US firms are guilty.

American funds are priced at 4pm every day. If you place an order to buy the fund after 4pm,